Japan warms to 'fire ice' potential

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Japanese officials hope 'fire ice', a potential new energy source, will win their resource-poor nation a measure of energy independence

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A Japanese research group has extracted methane gas from frozen undersea deposits

Japanese officials hope this will gain a measure of energy independence

Prospects for commercial extraction remain uncertain

Japan has moved closer to unlocking a potential new energy source, after a research group extracted methane gas from frozen undersea deposits for the first time.

Japanese officials hope the achievement, in a test conducted off Japan's central Pacific coast, will win their resource-poor nation a measure of energy independence. It was announced a day after the second anniversary of the Fukushima earthquake, tsunami and nuclear crisis that crippled the country's atomic power industry and exposed its lack of domestic energy sources.

Japan Oil, Gas & Metals National Corp said on Tuesday it had successfully extracted gas from deposits of methane hydrate, a hyper-abundant mix of frozen water and methane sometimes called "fire ice". Other countries, including the US and Canada, are also conducting research on methane hydrate, which experts say is at least twice as plentiful as all known reserves of natural gas.

Prospects for commercial extraction remain far from certain. But Ryo Minami, director of the oil and gas division at Japan's Agency for Natural Resources, compared methane hydrate to shale gas, the once-marginal resource which is transforming the US energy market: "Ten years ago, everybody knew there was shale gas in the ground, but to extract it was too costly. Yet now it's commercialised."

With virtually no conventional fossil fuels of its own and a nuclear industry crippled by the Fukushima disaster,Japan has been keen to develop new sources of energy, however speculative they may appear. It is estimated that the methane trapped in the Nankai Trough could replace up to 11 years of liquefied natural gas imports.

Economically, however, offshore methane could struggle to compete with LNG at a time when new drilling techniques have opened up previously unreachable shale deposits and lowered prices. One estimate put production costs for methane hydrate-derived gas at Y92 ($0.95) a cubic metre.

That is about nine times the US benchmark -- the Henry Hub futures price -- for LNG. Japan typically pays about four times the Henry Hub rate for its imports.

If test wells prove safe and economic, commercial methane production could begin as early as 2016.

Methane has previously been extracted from methane hydrate buried deep under Arctic permafrost, but not from ocean deposits. The substance is formed by a combination of high pressures and cold temperatures. To produce usable gas, methane is separated from from a "cage" of ice by sucking out seawater to lower the surrounding pressure. One cubic foot of solid methane hydrate yields about 164 cubic feet of gas.

One of the goals of the Japanese test, which is being conducted over two weeks, will be to measure the amount of seabed that can be sufficiently depressurised to release collectable gas. The wider the area that can be exploited with each well, the more economically viable the technology.

But environmental experts have warned of potential hazards. While methane is a cleaner source of energy than oil or coal when burnt, on its own it is an unusually powerful heat-trapping agent -- perhaps 20 times more potent than carbon dioxide.

That has created concerns about the consequences for climate change should the gas escape into the atmosphere during drilling.